Definition of Social Business Software: SaaS based software companies that provide social software to corporations to use. Popular names include Jive, Buddy Media, Radian6, Lithium, Hootsuite. This does not include consumer social networks like Facebook and Twitter, a report I’ll publish in near future.

VC, Investor, Angel: These are all investors in the Social Business Software spaces. They often receive money from LPs (Limited Partners) who charge them for investing in markets. On average, VC firms have a 1-3% management fee of overall fund they manage, and have a carry of 10-30% of total take of return from a fund.

Altimeter conducted analysis of a data set of 55 Social Business Software companies (see list here) in Dec, and has not updated data set to reflect recent funding events, including Sprinklr, Spredfast this week.

One caveat that applies to all the following data, we cannot determine specific amount of which VC firm or investor has put into each round of investment. Even within the financial S-1 docs there’s cloudy wording on which firm put in what amount.

VCs are a key component of startups, they provide council, open doors, and can even help with auxiliary functions like recruiting, conferences, and biz dev relationships. Savvy VCs are doing value add beyond the check, and are starting to couple their portfolio together to build larger networks. Knowing which investor has blessed a startup is key, as it demonstrates confidence in the business model, executive team, and product roadmap. Buyers of social business should ask five key questions of startups about their investors. With that said, having investors is not a requirement, as one-third of startups did not take in investment as they can often go it alone.

Winner Circle: Social Business VCs Achieving Material Events
The following lists the startups with exit, and we listed each round of funding and who’s the investors:

Buddy Media (Acquisition)
Buddy Media acquired for an estimated $689M (source), raised a total of

Summary:First Round Capital (coincidentally, not from CA, although with SF offices) leads the pack with 2 material events, including investing two rounds in BazaarVoice with a double down. Sequoia bet hard on Jive, and yielded a strong IPO, and Jive posted a strong year with over $104 million in billings for 2011, Austin Ventures continues to be the leader in frequency of bets in social business, but also was involved in BazaarVoice IPO The following firms had one material event, and invested in one startup, in two rounds: Austin Ventures, Battery Ventures, Bay Partners, BDC Venture Capital, Brightspark Capital, Comcast Ventures, Constantin Partners, General Catalyst Partners, Greycroft Partners, Institutional Partners, Sequoia, SoftBank, Sommerhill Venture Partners, Summit Partners.

There’s 20 other folks listed above, including angels that are too numerous to list, but I’ve segmented funding frequency by round on a prior report. There doesn’t appear to be any clear lucky streak among this investment class, although First Round has also heavily invested in Gigya in later stage rounds, so it would be key to watch their movements as they continue to grow. This is just a snapshot in time, and while IPO market is unfavorable now, expect most exits to closely tie to M&A this spring, before the large software companies go on their conference tour of a larger suite. Expect additional M&A to happen this year, although IPOs will be fewer and far between in 2013 in social business software.

Stay tuned for future analysis on VC impacts on consumer social networks.